Accounting Procedures (are they a sham)

I am looking at the quarterly report from Sands. Casino operations took a billion dollar hit in china (year over year). A whopping 29.5%. You can imagine with a new $2.5 billion resort opening up in China how nervous that can make people.

Not to fear, the effect was minimized by resort operation costs being reduced by $573 million for the quarter (22.6%).

Now logically, you reason if revenue goes down by that much, you trim back expenses. You keep some tables closed, you pay less overtime, you don't replace as many people with normal attrition, maybe you cut back on bonuses, etc.

But at the same time, you have to reason that bulk of your expenses are fixed. You still have to clean as many rooms (you may be giving away more rooms to keep gaming up). You must keep the lights on, you have the same mortgage, you still have repair expenses, the bars are still operating.

You wonder how they trim back resort operations by $573 million? You only get one suitcase full of cash after the quarterly meeting instead of two. You have to give up on private jet rides to Europe. The executives have to enjoy just one $1000/hour hooker instead of two or three at one time.

Here's a photo of a B747 belonging to Las Vegas Sands in Tel Aviv. LVS has two B747's, 3B737's, and a B767 active, with two other planes in storage. Should we assume that the B747 is in Tel Aviv looking for gamblers, or in pursuit of Sheldon's political manipulations?

That's a 747SP, so they saved a few bucks by buying an older used jet.

Operations means the People's Grand District Thief of all the Thieves gets a kickback for arranging for his lesser thieves to take vacations to gamble the money they all stole from the People. If the Lord High Executioner makes any dents in the thievery operations go down without having to worry about employee attrition.

In accounting terms, its known as a Capital Adjustment. As political prisoners in the mainland lose their heads after corruption trials, there is a net capital adjustment. Fewer heads; fewer bribes.